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                                                                     EXHIBIT 5.1


                      LETTERHEAD OF CLIFFORD CHANCE US LLP

November 14, 2002


iStar Financial Inc.
1114 Avenue of the Americas, 27th Floor
New York, New York 10036


Dear Sirs:

     We have acted as counsel to iStar Financial Inc. ("iStar Financial") in
connection with the offer and sale by iStar Financial of 8 million shares of its
common stock, par value $0.00l per share ("Common Stock"), and the offer and
sale by SOFI-IV SMT Holdings, L.L.C. (the "Selling Stockholder"), of 2,000,000
shares of Common Stock. The Common Stock is being sold pursuant to iStar
Financial's Registration Statements on Form S-3 (numbers 333-83646 and
333-32946) under the Securities Act of 1933, as amended (the "Registration
Statements").

     Based on the foregoing, and such other examination of law and fact as we
have deemed necessary, we are of the opinion that the Common Stock has been duly
and validly authorized and, when issued and sold in the manner contemplated by
the prospectus supplement for the offering of the Common Stock dated November
14, 2002 for at least its par value, the Common Stock will be legally issued,
fully paid and non-assessable.

     We consent to the filing of this opinion as an exhibit to the Registration
Statements and to the reference to us under the caption "Legal Matters" in the
prospectus which is a part of the Registration Statements.

                                Very truly yours,

     CLIFFORD CHANCE US LLP